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Beware of the Cowardly Deficit Vulture
It Nests with Corporations, Squawking for Tax Breaks, Bailouts and Military Contracts that Have Little to do with National Security
There's an invasive species in our national discourse, a recent arrival in our civic forest. It's the "yellow-bellied deficit vulture," recently spotted circling the Capitol building and heard squawking on syndicated talk shows.
You can identify the vulture by its distinct screech it uses to selectively attack spending choices like unemployment benefits for hard-pressed workers. The vulture flaps furiously about President Barack Obama's spending in response to the worst economic meltdown in 60 years. But it is close-beaked about the previous decade, when both parties in Congress and President George W. Bush borrowed trillions of dollars to fight two wars and give tax cuts to corporations and the super-wealthy. He's also eerily silent about the $1 trillion over 10 years in military spending waste, identified by the Sustainable Defense Task Force watchdog panel.
That's because the yellow-bellied deficit vulture has powerful interests to defend and is determined to keep some things "off the table." Fortunately, this vulture is conspicuous with its bright tail-feathers of excessive political partisanship.
To be clear, the vulture is distinct from the vigilant "deficit hawk," which, like most Americans, is concerned about the national deficit and its impact on our economy and future generations. It can recognize the urgent need to assess the causes of the deficit and make thoughtful choices going forward. A mature hawk knows that budget politics are complicated and that borrowing is the path of least resistance for both major political parties. It understands the pressure that politicians face from powerful constituents that want both tax cuts and preferential spending.
That's why a mature deficit hawk would reconsider the prudence of the 2001 and 2003 tax cuts for households with incomes over $250,000, which are due to expire at the end of this year. Retaining the tax cut would add $826 billion to the national debt over the next decade.
But the deficit vulture takes flight when faced with the possibility of reversing reckless tax cuts for multi-national corporations and the very wealthy. Instead, it appears bold about cutting retirement benefits for future generations.
Seasoned hawks also demonstrate support for two proposals that would generate over $200 billion per year and strengthen the U.S. economy: closing overseas tax havens and instituting a financial speculation tax. This is wisdom we should follow.
U.S. multinational banks and corporations use overseas tax havens to reduce or avoid taxes, adding billions to the deficit and creating phony subsidiaries in places like the Grand Cayman Islands. They compete unfairly against responsible domestic businesses that pay taxes. Such tax-dodging costs responsible American taxpayers an estimated $43 billion to $123 billion a year.
A financial speculation tax is a modest levy on financial transactions, such as the purchase and sale of stocks, bonds, derivatives, and swaps. One proposal would collect a penny on every four dollars of financial transactions, generating an estimated $177 billion a year. Hawks in England and Taiwan have secured such taxes on securities that encourage productive investment and discourage the kind of reckless trading that crashed our economy.
Here in America, the yellow-bellied deficit vulture is doing all it can to make sure we don't consider these proposals. It nests with corporations, squawking for tax breaks, bailouts, and military contracts that have little to do with national security. We can't allow this bird to distract us from the serious national discussion we need to have.
11 Comments so far
Show AllOutstanding article on pointing out the double standards on deficits. Do not be surprised if people oppose raising any taxes because of their fear that the money will go towards more war spending or the Fannie and Freddie type "bailouts".
You have hit the nail on the head here. It is b.s. to argue against progressive taxation because some of the money will go to warfunding. Today on MSNBC it was pointed out that our gov't is spending $14 dollars in the Middle East for every $1 dollar here at home. This disparity is a fast growing cancer on our country. We are throwing our fellow citizens into a toxic sewer and refusing to throw them a lifeline. We, instead, shout encouragement about " just keep your head above the crud, help is on the way. " Then we leave and feel we've done all we could. No one wants to face up to our war mentality and its' cost. We are killing Americans at home just as we are killing innocents in Iraq and Afgan/Pakanistan. Until our unfortunate neighbors die from the result of our neglect and we actually have to smell their rotting corpses will their be a chance to stop this illness. Maybe when the wealthy are forced to pay for their support of this disaster, thru taxation, they will buy the political courage to change this war mentality run amok. I'm not holding my breath on this, though. I really feel we are doomed.
Saddest of all is that deficit hawks have no intention of ever decreasing the deficit, they just want to see the money re-deployed from domestic programs that benefit 100% of Americans to corporate welfare programs that benefit 2% of Americans.
As soon as the money is re-deployed from domestic programs to corporate welfare programs the hawks will push even harder to increase the amount taxpayers spend on corporate welfare programs, thereby further increasing the deficit.
That about sums it up. Police state policy holders = Corporations. Enemies of the police state =s Everyone who doesn't cooperate with the Corporations.
Remember that of that 14 dollars spent in the Middle East for every dollor spent at home, the BULK Of those 14 dollars goes into the hands of the Corporations. These the guys selling fuel to the US Military for 300$$ per gallon, or the monies (96 percent) they simply can not account for.
In truth its not being SPENT over there, it is being LOOTED.
"[T]he yellow-bellied deficit vulture has powerful interests to defend and is determined to keep some things 'off the table.'"
Those things "off the table" are those which feed the bird. We need to have a dialogue without the distraction of the bird, but that will be impossible until we have conducted a campaign of attrition on that which feeds the bird.
>>>U.S. multinational banks and corporations use overseas tax havens to reduce or avoid taxes, adding billions to the deficit and creating phony subsidiaries in places like the Grand Cayman Islands. They compete unfairly against responsible domestic businesses that pay taxes. Such tax-dodging costs responsible American taxpayers an estimated $43 billion to $123 billion a year.
It's stating the obvious, but they are able to get away with it because the politicians who are responsible for oversight are in their pocket. As simple as that. This is happening in India too. Most of the foreign "investment" in India is routed through Mauritius, so much so that Mauritius is the largest foreign investor country in India, with over 44% of foreign capital into India coming from Mauritius, with only a little over 5% of the capital going from US-based investors. If you feel you missed this story of Mauritius becoming so rich, it's because there's this obscure arrangement between India and Mauritius to avoid double taxation, that was supposed to help that island country. And then investors such as Goldman Sachs and other hedge funds found out that was a neat little way to avoid paying taxes in India for their profits there. All they had to do was to keep the government looking the other way. Apparently they went overboard on that, and recently the Indian government is reviewing their treaty with Mauritius.
I say this because the MO is the same for global capital, and it is not so difficult to bring them under control - that is if any country really wants to.
>>>A financial speculation tax is a modest levy on financial transactions, such as the purchase and sale of stocks, bonds, derivatives, and swaps. One proposal would collect a penny on every four dollars of financial transactions, generating an estimated $177 billion a year. Hawks in England and Taiwan have secured such taxes on securities that encourage productive investment and discourage the kind of reckless trading that crashed our economy.
I guess the author must be using "hawks" in a good way - to mean those who are watchful and not easily fooled by some BS? Although Taiwan has a transaction tax, it had already cut this rate from 0.6% to 0.3% some time in the 1990's. Taiwan also removed tax on capital gains on securities. And during the 2008 global crisis, there was heavy pressure on Taiwan to reduce the tax even further - to 0.15%.
There is no shortage of "experts" who keep producing study after study to "prove" how such a tax affects liquidity and all that, using words such as "kill the market" to scare off any government even considering such a tax. If you think there's a well-entrenched denial industry on the topic of climate change, when it comes to the topic of transaction tax on stock trading, even experts don't stand a chance. Unless you listen to people like Joseph Stiglitz, who has been quite consistent on this matter - even though he too proposes only a modest 0.05% tax - which itself is supposed to raise hundreds of billions in tax revenue, on a global level.
Maybe we need to speed things up a bit, so that we can get to the total destruction of our nation, so that those that are left can start over.
Great article. Only it is insulting to vultures to compare them to these financial vermin. It would be insulting to any animal to compare them to these lowest of life forms.
A financial speculation tax is not only a great way to raise revenue but would help to return the stock market to a place of investment rather than a gargantuan gambling casino. Where all the financial dealers, such as hedge managers, are skimming off the top.
The Bush tax cuts should be allowed to expire. From 1946 to 1980, the top income tax rate used to be anywhere from 70% to 92%. Reagan than dropped them to 50% and then 38.5%. Bush dropped the highest rate to 35%. In my view, the tax rates should not only return to 39.5 but be raised to 50% on anything over 200,000. And all tax havens should be made transparent.
These higher tax rates, anyway, were the result of America engaging in warfare. The original high income rate was 7% in 1913; by the end of WWI it was 77%. After WWII, the HR had raised from 79% on incomes of 5 million to 94% on incomes of $200,000 or more. Our high tax rates are the result of warfare; not social services. This is a lie that so-called conservatives use to try to get rid of social services.
Vietnam added to the large deficits and caused inflation, which led to spiraling deficits. The HR stayed at 70% or above throughout the occupation of Vietnam.
Now these yellow bellied liars are trying to cut social security after they drastically raised payroll taxes in 1983 (thanks, Greenspin) to save up a fund that amounts to more than 2.5 trillion. We shouldn't have to cut SSI AT ALL till the government pays up on that money they spent on other things, probably defense spending.
Back around 2002, I remember Bush smirking into the camera on some interview and saying, "we can do anything we want with those SSI taxes." So, he as president, doesn't have to follow the laws of congress. We don't hear anymore about the social security trust fund now.
I also hear the cries of deficit vultures screeching about privatizing government. They advocate selling outright our national treasures including our national parks, roads, bridges, dams, the Strategic Petroleum Reserve, and even the gold at Fort Knox.
http://crfb.org/blogs/deficit-challenge-turns-government-assets